WASHINGTON D.C.– Former Export-Import Bank Chairman James Harmon today called for a major revamping of the rules governing Export Credit Agencies (ECAs) on the eve of new negotiations at the Organization for Economic Cooperation and Development (OECD).
Harmon said, “If we are to achieve the Millennium Development Goals (MDGs) of poverty reduction, increased health care and a sustainable environment, we will have to use every possible tool available to us. With the right changes, ECAs can be a big help.”
The recommendations for such changes are contained in a new report released today by the World Resources Institute (WRI). Co-authored by WRI Board Chairman Harmon, Crescencia Maurer, Jon Sohn and Tomas Carbonnell, the report is titled Diverging Paths: What Future for Export Credit Agencies in Development Finance? The WRI report investigates the limited extent to which sustainable development considerations are currently integrated into projects supported by ECAs; it recommends strategic structural reforms to improve their lending practices.
ECAs are bilateral public banks that facilitate financing for corporations doing business overseas, particularly in developing countries. ECAs have been established by every major industrialized country, including all members of the G8, and provide approximately $70 billion in annual funding for developing countries to buy goods and services – almost five times the financing provided by the World Bank Group.
Harmon added, “If we are to achieve the MDGs, we will need to be more creative. Industrialized nations cannot preach sustainable development on the one hand, and allow public finance to undermine it on the other.”
The negotiations beginning this week will set global standards for ECA lending in areas that include environmental requirements, anti-bribery measures, and renewable energy. The WRI report suggests measures that ECAs can take that will support the MDGs, yet still retain the economic rationale that have traditionally underpinned ECAs.
The report is available from WRI and online at: http://pubs.wri.org/divergingpaths-pub-3930.html
The World Resources Institute (www.wri.org) is an independent, non-partisan and nonprofit organization with a staff of more than 100 scientists, economists, policy experts, business analysts, statistical analysts, mapmakers, and communicators developing and promoting policies that will help protect the Earth and improve people’s lives.
